The "real" housing starts numbers. Just came across this.
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Today’s February housing start report has brought forth headlines such as “white-hot recovery” and “super-strong housing market”. A closer look reveals that this is more of a statistical recovery than a real one. Economists take the actual monthly number and then seasonally adjust it and annualize it. February housing starts were actually 119,500. This is down from last June’s 155,200, but when seasonally adjusted and annualized, February came out at 1,769,000 and June at 1,634,000. What happened was that February, usually a cold month was much warmer than usual, so housing starts were down less than normally. Under this method, 11,000 additional starts made possible by the warmth gets translated into 146,000 more starts on an annual basis. We’re not criticizing seasonal adjustments or implying that anyone is deliberately trying to mislead. It’s just that abnormal weather messes up the seasonal adjustment process. The retail sales and employment numbers, also widely hailed as improving indicators suffer from the same distortions.
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